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Full text of "South Asia, 1976 : a report"

yv.rWJ 8/7/ ?7^ 






94th Congress 
2d Session 



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COMMITTEE PRINT 



SOUTH ASIA: 1976 



A REPORT 

BY 

Senator George McGoyerx 

TO THE 

COMMITTEE OX FOREIGN RELATIONS 
UNITED STATES SENATE 










APRIL 1976 \"^\^ /£-; 



Printed for the use of the Committee on Foreign Rela 




U.S. GOVERNMENT PRINTING OFFICE 
rl5 Yv'ASHINGTON : 1976 



COMMITTEE ON FOREIGN RELATIONS 



JOHN SPARKMAN, 
MIKE MANSFIELD, Montana 
FRANK CHURCH, Idaho 
STUART SYMINGTON, Missouri 
CLAIBORNE PELL, Rhode Island 
GALE W. McGEE, Wyoming 
GEORGE S. McGOVERN, South Dakota 
HUBERT H. HUMPHREY, Minnesota 
DICK CLARK, Iowa 
JOSEPH R. BIDEN, Jr., Delaware 



Alabama, Chairman 
CLIFFORD P. CASE, New Jersey 
JACOB K. JAVITS, New York 
HUGH SCOTT, Pennsylvania 
JAMES B. PEARSON, Kansas 
CHARLES H. PERCY, Illinois 
ROBERT P. GRIFFIN, Michigan 



Pat M. Holt, Chief of 84aff 
Abthcb M. Kuhl, Chief Clerk 



(ID 



CONTENTS 



Page 

Letter of transmittal v 

Pakistan 1 

Foreign policy outlook 1 

Internal situation 3 

India 7 

India and the world 7 

India and her neighbors 8 

India and the United States 8 

Internal situation 11 

Summary 14 

Bangladesh 16 

Foreign affairs 17 

Internal developments 18 

Conclusions 21 

(in) 



> :■ ! i 



i»>3 ,: i ■:, 



LETTER OF TRANSMITTAL 

March 26, 1976. 
Hon. John Sparkmax, 

Chairman, Committee on Foreign Relations, U.S. Senate, Washing- 
ton, B.C. 

Dear Mr. Chairman : Enclosed you will find a report on the trip I 
undertook to South Asia in January. 

I left Washington on January 1 and visited Portugal, Pakistan, 
India and Bangladesh before concluding my study mission with four 
days in Vietnam. I am forwarding to you separate reports on Portugal 
and Vietnam. 

Accompanying me were my wife, Eleanor: George Ash worth of the 
Committee staff; John Holum, my foreign affairs specialist: Robert 
Shrum, staff director of the Select Committee on Nutrition and Human 
Needs; and my secretary, Pat Donovan. I wish to extend special 
thanks to all of them for the contribution they made to this study 
mission. 

"We arrived in Rawalpindi January 4th and left immediately for an 
inspection of the Tarbela dam complex northwest of Islamabad and 
Rawalpindi. Upon our return to the capital, Islamabad, we had an 
opportunity to talk at length with Mr. Aziz Ahmed, the Minister of 
State for Defense and Foreign Affairs : Mohammad Yusuf Khattak, 
Minister of Fuel, Power and Natural Resources; Ambassador Henry 
A. Byroade, and other officials of the Foreign Ministry and the Em- 
bassy. Several members of the party joined me in a visit with Piv- ; - 
dent Zulfikar Ali Bhutto at his retreat at Larkana. Two members of 
the staff remained in Islamabad for further discussions. 

The party reassembled at Lahore for discussion with Indian of- 
ficials, Consul General William F. Spengler and his staff, as well as a 
tour of the city. The next day we went on by car across the border and 
stopped at a village in the Punjab. After talking with villagers and 
seeing the school lunch program in operation, we went on to Amritsar, 
the center of the Sikh religion. From there we flew to Delhi. 

During my four days in India I conferred with Prime Minister 
Indira Gandhi; Y. B. Chavan, the Minister of External Affairs: J. J. 
Ram, Minister of Irrigation and Agriculture: and other Indian of- 
ficials. I also had several detailed discussions with Ambassador Wil- 
liam Saxbe and his staff. From Delhi we flew to Calcutta and spent a 
very productive day seeing the conditions in Calcutta before Hying <>n 
to Daroa, Bangladesh, on January 11. 

In Bangladesh I had an opportunity to talk with President and 
Chief Martial Law Administrator, A. S. M. Sayem : the Army Chief 
of Staff and Deputy Chief Martial Law Administrator, Major Gen- 
eral Ziaur Rahman: Chief of Naval Staff and Deputy Chief Martial 
Law Administrator, Mosharraf Hussain Khan: Foreign Secretary 

(V) 



VI 

Tabarak Hussin ; and the President's Advisor for Family Planning, 
Dr. Mohammed Ibrahim. The staff and I also had extensive discussions 
with Charge d'Affaires Irving G. Cheslaw and members of his very 
able staff. 

We left Dacca on Tuesday. January 13th, for Hanoi and Saigon. 

As Chairman of the Subcommittee on Near East and South Asian 
Affairs, I have been trying for some time to have the opportunity to 
visit the subcontinent and to get a first hand look at some of the prob- 
lems there as well as to discuss these problems with the officials most 
directly concerned and with American experts in the field. I had very 
much wanted to go also to Afghanistan, Nepal and Sri Lanka, but 
time simply did not permit. I hope that in my next visit I will be able 
to cover more of the subcontinent. 

With only about ten days available to spend in the subcontinent, 
we were clearly able to touch upon some of the more serious problems 
in only a bread way. Consequently, I am reluctant to offer numerous 
recommendations as to the proper American priorities and to solutions 
of lingering, tenacious problems being faced in the countries we vis- 
ited. I did reach some conclusions as to changes which should be con- 
sidered, and you will find these suggestions outlined in the relevant 
sections of m} T report. I expect to make further recommendations in 
the context of the authorization process during the current year. There 
was one matter of allowing Bangladesh to sell its agricultural prod- 
ucts and raw materials to any potential customer without jeopardiz- 
ing the critically important PD-4S0 shipments. I have already written 
Secretary of State Kissinger in this regard setting forth my views 
and asking that the necessary steps be taken as soon as possible. 

In the course of my trip I was particularly impressed by the calibre 
of people assigned to United States missions and the obvious depth 
of their expertise. I found continued evidence of a pragmatic aware- 
ness of the problems of South Asia and a high degree of realism as 
to what should be accomplished and what the obstacles are to success. 
Without exception the arrangements made by the embassies were care- 
fully thought through and allowed the party to accomplish a great 
deal in the limited time available. 

I should note also the hard work being done by the numerous volun- 
tary agencies. I saw at first hand some of the efforts of CARE. I be- 
lieve all Americans would be proud of the selfless dedication of these 
volunteers in extremely difficult and trying circumstances. 
Sincerely, 

George McGoverx, 
Chairman, Subcommittte on Near East 

and South Asian Affairs. 



SOUTH ASIA: 1976 



Pakistan 



Since the difficult war in 1971 in which Pakistan lost East Pakistan 
(now Bangladesh), the government of Pakistan has been beset by 
severe social, economic and political problems. 

Defeat in the war and the loss of Bangladesh led to the fall of the 
old government. Mr. Zulfikar Ali Bhutto assumed leadership under 
martial law in the aftermath of the war. In the months after the war. 
he overhauled the military, purged the civil service and moved to insti- 
tute numerous reforms. In April. 1972, Pakistan's first directly elected 
Xational Assembly was conveyenecl and martial law was lifted. 
Mr. Bhutto was inaugurated to the presidency. Under his guidance a 
consensus was achieved for a new constitution to create a govern- 
mental structure which would revitalize Pakistan. The new constitu- 
tion came into effect in August, 1973. and Mr. Bhutto became Prime 
Minister of a strong, centralized government. 

Xow at the start of the fifth post-war year, Pakistan has made 
impressive gains, although Americans and Pakistanis we talked with 
see many remaining and some deepening problems. 

FOREIGX POLICY OUTLOOK 

Since the war, the government of Pakistan has been trying assidu- 
ously to strengthen its worldwide political ties, with particular em- 
phasis on relationships with the Arab world, China and the United 
States. Mr. Bhutto espouses a policy of "bilateralism*', which is de- 
scribed as a policy of seeking good relations with all countries, without 
implying full support of all the policies of any one country or side. 

More recently, Pakistan has been particularly concerned with de- 
veloping relationships with the lost territory, Bangladesh. When 
Sheikh Mujibur Rahman was assassinated in Bangladesh last Au- 
gust 15, Pakistan recognized the new military regime within a day. 

Since, well aware of the risks vis-a-vis India which a too speedy 
and too enthusiastic rapprochement with Bangladesh might entail, 
Mr. Bhutto has adopted what observers see as a careful and judicious 
approach to improving relations with Bangladesh. While we were in 
Pakistan, the envoy from Bangladesh arrived with a warm welcome. 
Later, we were in Bangladesh when the new Pakistani Ambassador 
arrived with red carpet treatment. 

The Pakistanis appear aware of the potential difficulties the new 
relationship with Bangladesh might cause the government of India. 
Pakistani officials claim that their intent is to maintain good relation- 
ships throughout the subcontinent, and we were told that Pakistan 
desires to do nothing in regard to Bangladesh which would jeopardize 
the relationship with India. 

(1) 



Many issues remain between Islamabad and New Delhi. There have 
been some positive steps between the two sides since the 1971 war. 
Some of the issues arising from the war, such as the detainment of 
approximately 9,000 Pakistani troops and civilians by India, have 
been resolved, but the relationship remains cool with tensions in many 
areas. The two sides have agreed to such steps as the re-establishment 
of postal and telephone lines, but bigger issues such as the basic one 
of diplomatic relations remain unresolved. There is mutual fear and 
mistrust. We were told in Islamabad and in Delhi that there was no 
doubt that the other side was preparing for war at that moment. 

This continued military fear and confrontation costs both Pakistan 
and India incredible amounts in terms of the total budget. Pakistan 
has a very weak economy with a GNP of approximately $12.5 billion. 
The budget is $3.5 billion. With $700 million subtracted for defense 
and onther $1.5 billion for recurring costs, the developmental budget 
is only $1.3 billion. 

Pakistan earns about $1 billion from its exports yearly. Currently, 
imports are running at the level of $2.2 billion a year and going up 
rapidly. Since the Middle East war in 1973, oil imports have gone 
from about $60 million to more than $400 million. Without outside 
help, particularly from the oil-producing countries. Pakistan would 
have had to cut development programs drastically and slash the level 
of imports. The oil-producing countries committed almost a billion 
dollars and disbursed $500 million to Pakistan in fiscal 1975. 

The United States has been providing $175 to $200 million a year, 
with more than half of the assistance in the form of PL-480 wheat 
and vegetable oils. Foreign debt now exceeds $6 billion, and debt 
service alone takes more than one-fourth of foreign exchange earnings. 

Pakistanis looking at the world around them in a geopolitical vein 
express a great deal of foreboding. They are not sure that the relation- 
ship with Afganistan, now characterized by a great deal of bitterness 
and invective, can be softened into a gentler coexistence. While 
Afganistan alone is not a military threat, Pakistanis worry about 
long-term Afghan and Soviet plans. Similarly, they look at India and 
count up the Indian divisions on the border and conclude that India 
could pounce at any time. These concerns have led Pakistan to be dili- 
gent in trying to promote solutions to continuing issues with her neigh- 
bors. At the same time she looks to the West for moral and monetary 
support as well as to the Arab states. 

Pakistan urgently pushed for a lifting of the embargo on shipment 
of non-lethal military equipment from the United States, and the 
United States lifted that embargo nearly a year ago. The Pakistanis 
have been discrete in their arms requests. Most of the purchases since 
have been of nonlethal equipment and parts. The only notable excep- 
tion was the purchase of some TOW anti-tank missiles and launchers. 

The Pakistanis want a normal and steady arms supply from the 
United States, but appear to be willing to use restraint. Sales in 1974 
were $36 million and in 1975 were $46 million. However, a big problem 
looms on the question of aircraft. The Pakistanis want a sophisticated 
close-air-support plane. One being mentioned is the A-7. So far, the 
United States Embassy says it will not encourage the Pakistanis to 
purchase new aircraft. It seems to me the United States should con- 
tinue the policy expressed when the embargo was lifted and avoid 



3 

encouraging or taking part in the potentially provocative build-up of 
any armed forces in the subcontinent. The best course for the 
Pakistanis is to maintain solid defensive forces which could deter an 
attacker. However, the Pakistanis cannot afford to build a military 
force which would threaten neighbors. The result would be increased 
spending throughout the subcontinent and a building of the military 
chips higher and higher to no avail. 

An issue closely related to these military questions is that of 
Pakistan's developing nuclear program. At present, Pakistan is con- 
templating a sharp expansion of its nuclear power program with the 
purchase of 12-14 light water reactors for power in the 1980 ? s and 
1990's. In addition, Pakistan intends to purchase a nuclear reprocess- 
ing plant. The United States is trying to persuade the Pakistanis not 
to move now to get nuclear reprocessing, which can be a key step 
toward a nuclear weapons program. Not only is nuclear reprocessing 
extremely expensive — an important factor for a country with con- 
tinuing deficits — it is also a potentially destabilizing step. 

Yrhile I sympathize very much with Pakistanis concern in regard 
to the Indian program, it is in the interests of all concerned that money 
not be wasted to gain a nuclear weapons option. The United States and 
the other nuclear suppliers should be very firm in their efforts to keep 
India and Pakistan from any further steps toward a nuclear weapons 
option. 

INTERNAL SITUATION 

Mr. Bhutto, a forceful and erudite leader, appears to retain much 
of the charisma attached to him when he came to power after the 
1971 war. He assumed leadership of a shattered, bewildered and de- 
moralized country and played the central role in getting the country 
moving again. Perhaps his greatest achievement is the restoration 
of Pakistan's self-confidence and respect and its standing in the inter- 
national community following the 1971 war. 

Looking beyond these impressive achievements, observers note that 
Mr. Bhutto rules with a firm hand which many believe is becoming 
more authoritarian. Some observers believe that the new constitution 
promulgated by Mr. Bhutto, for which he sought and received a 
consensus, represented a lapse from the authoritarianism which has 
characterized Pakistan since independence, rather than the beginning 
of a new political structure. Few doubts that Mr. Bhutto and those he 
supports have an ability and the desire to win elections — by fair or 
questionable means — and to stay in power. Mr. Bhutto can — and has — 
jailed persons he believes threaten national security and deprived 
them of the right to bail. Mr. Bhutto's critics point to the ominous 
growth of three police units — the central intelligence bureau, the cen- 
tral police and the central security force. 

Mr. Bhutto's extremely personal hold on the reins of power has 
allowed the fast focusing of governmental energies when Mr. Bhutto 
wants to push specific programs. This has helped promote many im- 
portant programs, although many observers sense that this kind of 
leadership lias had. upon occasion, too rapid shifts in priorities and a 
sometime absence of follow-through. 

So far, Mr. Bhutto appears to have done little to build political 
institutions which could outlast him. There is no heir apparent. 

6S-715— 76 2 



For the elite in Pakistan, service in the federal government has 
long been a good livelihood. This has accounted in large part for the 
excellence of the Pakistani foreign service and for the concentration 
of talented persons in government bureaus. However, the government 
is not innovative. Mr. Bhutto prefers to keep power to himself and a 
select group of advisors, leaving the other bureaucrats without clear 
mandates or authority. 

Local government is relatively undeveloped in Pakistan and demo- 
cratic roots are frail at best. Observers believe that the Bhutto govern- 
ment has done little to change this. Governmental services — such as 
they are — are extended down from Islamabad through the provinces 
and to the districts. But the government must work on its infrastruc- 
ture if it is to make substantial progress in a number of areas. 

All this does not mean that there have not been big chances in the 
villages. Both diet and nutritional balance are improving, although 
about 60 percent of the population is considered malnourished. This 
situation may improve as a result of a major world food program to be 
initiated in Pakistan, but observers believe that the program may give 
too much too fast without adequate preparation. 

One of the major difficulties of the Pakistani government appears 
to be in its long-range planning. There is some question whether the 
planners have sufficient access to the leadership and whether opera- 
tional decisions give sufficient weight to long-range plans. The govern- 
ment may be too ready to lean upon outside expertise — whether an 
embassy staff or an international agency — and thus avoid the problem 
of developing a competent and effective bureaucracy. 

Expertise is one pressing problem of the government. There is a con- 
tinuing drain of the educators, skilled and semi-skilled, to other coun- 
tries. This has led to a lack of talent in depth throughout the adminis- 
trative structure. This problem is more acute the further down the 
governmental chain one goes. 

Iran, Saudi Arabia and the developing nations of the Gulf are par- 
ticularly happy to hire Pakistanis. A number of the air forces in the 
Arab states probably could not operate without the Pakistanis. The 
Moslem Pakistanis are believed by the Arab states to be more unlikely 
to give religious offense than workers who might be imported from 
elsewhere. Thus, throughout the Arab states one finds Pakistani 
barbers, gardeners, metal workers, tailors and servants. In Abu Dhabi, 
for instance, there may be more Pakistanis than natives. 

The drain is evidence elsewhere. One observer said, partly in jest, 
that the British health services would fall apart if the Pakistanis left. 

The Pakistanis do not know quite what to do about this. They talk 
of bringing back skilled civil servants from world institutions to help 
strengthen the government but no one knows quite how this would be 
accomplished and attempts to discourage emigration have not suc- 
ceeded. Some observers believe that Pakistan must pay more attention 
to primary and middle level education and less to higher education 
and post-graduate institutes. 

Illiteracy is still around 80 percent and fewer than 50 percent of 
ihe children are in primary school. The government spends approxi- 
mately $16 a year per child on primary schooling for 5 million chil- 
dren. This is about one percent of the spending for the United States. 
Pakistan's next door neighbor Iran is doing about 20 times as much. 



There is general agreement that the concept of national service to 
Pakistan is not widely held. Only the military are thought to place 
great weight on service to Pakistan. Pakistan remains sociologically 
quite tied to the family and to the tribe. Social equality remains a dis- 
tant concept. 

When he came to power Mr. Bhutto nationalized about 20 percent of 
the industry, which helped to break the power of the big industrialist-. 
Nationalization did not particularly affect the rural rich. Those 
powerful in trade and commerce escaped relatively unscathed, leaving 
only the industrialists as a class to lose heavily. As a result. Pakistan's 
industry has not developed significantly in recent years. The largest 
programs are governmental. Private industry is kept small so that it 
would be hard to nationalize and wealthy Pakistanis tend to keep fixed 
assets small to avoid nationalization. 

Agriculturally, Pakistan has reasonable hopes of self-sufficiency. In 
the past decade, annual production of wheat has risen from approxi- 
mately 4 million bushels to the current 7X/ 2 million bushels, which is 
still iy 2 million under the need. In order to achieve wheat self-suffi- 
ciency, we were told, the supply of irrigated water must be improved, 
there must be better on-farm water control and management and fer- 
tilizer must be used properly and sufficiently. Pakistan spends $90 mil- 
lion annually importing fertilizer, but three big new fertilizer plants 
are to be built, and they could begin production in 1977. By 1980, 
Pakistanis expect to be self-sufficient in nitrogen. Phosphate still will 
be imported. 

At present, Pakistan falls far below other nations in wheat yields 
per acre in irrigated areas. They are less than half the average in 
India's Punjab. 40 percent of the yields in Egypt and only one-fourth 
those in the Netherlands. Other countries excel Pakistan in other 
crops. Yields of the two critically important export crops — rice and 
cotton — have been improved, but Pakistan could do much better. 
Pakistan's rice yields are better than those in India's Punjab, but well 
under one-half the yields in Egypt and Spain. Cotton yields are 40 
percent those of Egypt. Israel, with a high degree of irrigation tech- 
nology, does three times as well. 

The bulk of the crop yield is on the approximately 30 million irri- 
gated acres. Irrigated lands will be expanded and flow and control 
improved when the Tarbela dam is functioning. That will improve 
yield steadily. However, it is illustrative of the distance Pakistan has 
to go that Pakistan could grow enough of its basic food crop — wheat — 
on rain-fed lands alone, allowing greater use of the irrigated acreage 
for other crops, particularly the foreign exchange earners. Pakistan 
has about 10 million cultivable rain-fed acres. Perhaps 2t 2 to -3 million 
of those acres get 20 or more inches of rain a year, lii the United 
States, in similar situations, wheat yields of 60bushels an acre are 
common. In Pakistan, the yield is about eight bushels an acre. 

So far as water and electricity are concerned, much hope is placed 
in the new Tarbela dam project, which we visited. It is the largest 
earth-filled dam in the word. Magnificent in concept, the Tarbela (Tain 
will be capable of providing both water and electricity, Work began 
in 1908, and was to provide considerable water for irrigation last year 
and the year before. Unfortunately, the reservoir did not operate fully 
for reasons which are still the source of considerable controversy. Ap- 



6 

parently, the Pakistanis had not moved approximately 60,000 people 
who lived within the area of approximately 100 square miles covered 
by the dam reservoir, and water had to be discharged to keep the 
reservoir from inundating them. This discharge had not been planned 
and tunnels designed to take a water flow five miles an hour were torn 
apart as waters up to 105 miles per hour coursed through. The result- 
ing damage came to $65 million with the United States providing $10 
million of it. The reservoir is expected to be ready to provide irrigated 
water this year. The power stations are also to begin operation this 
year and will produce a total of 2,100 megawatts. So far the dam 
project has cost nearly one billion dollars. The Tarbela dam is the 
last portion of the Indus Basin Development Project. The United 
States is providing more than 30 percent of the total cost of nearly 
$2.5 billion. The entire project will increase Pakistan's irrigation 
wafer by 80 percent and quadruple the electricity-generating potential. 

Tarbela and related water control projects will not be completely 
successful unless the farm water management is improved. The gov- 
ernment has not yet addressed this problem in any large way. There 
is a tremendous need for rural electrification (less than 10 percent of 
Pakistan's 40,000 villages have electricity) and for more rural roads 
(only half of the villages have road access). 

Clearly the green reA^olution has had a salutary effect upon Paki- 
stan. However, a number of problems remain. For example, the under- 
strength extension service, which could do much to lead the way in 
improved food production, has few vehicles. Thus practically it is 
hard for extension workers to reach many of the farms. And with an 
illiteracy rate in Pakistan of at least 80 percent, it is hard for the 
farmer in the field to relate to or to understand middle-class extension 
workers. 

Thus there is very low spending in a number of crucial areas such as 
rural health and primary school education. In the field of rural health, 
Pakistan spends roughly $12 million for 50 million people. 

It has been hard for Pakistan to provide incentives for doctors to 
go into the rural health field. Doctors willing to make the monetary 
sacrifice find that tight budgets often leave them with little equipment, 
extremely limited medication, no transport and vastly more patients 
than they can treat. The country clearly needs to push training of 
medics and paramedic nurses. People are dying in Pakistan of dia- 
betes, appendicitis, heart attacks and many ailments which in the West 
often would be controlled or cured as a matter of course. 

At present, one of every four Pakistani babies dies before the age 
of five. Although small pox has been eliminated, other programs such 
as that for malaria have flourished, then failed. Attempts to bring 
clean water to the villages are becoming more serious and productive, 
but sewage disposal is still almost unheard of in the villages. Approxi- 
mately 80 percent of Pakistan, 70 million people, live in rural areas. 

Mr. Bhutto seems very much in charge and he is beginning to cope 
with some of the more pressing problems of his country. As an exam- 
ple, Mr. Bhutto appears to attach great priority to population plan- 
ning. The country has been inundated with birth control aid available 
for 2i/o cents per month. Still, only 10 percent of Pakistan's fertile 
couples appear to practice birth control. A long-standing concept in 
the subcontinent is that a couple needs six children — three will be 



girls and three will be boys. One of the boys will die; one will leave, 
and one will stay to support the parents in their old age. In order for 
birth control to work, it must be demonstrated to the rural poor and 
the less well off in Pakistan that the death rate is going down and 
that there is the kind of governmental concern and economic progress 
which will not leave the old to starve unless they have a guarantee of 
children to take care of them. 

It is very hard for birth control to be achieved through edict, as it 
runs counter to established beliefs and some religious views. Yet if 
birth control is not successful, Pakistan will never catch up agricul- 
turally, and self-sufficiency will become at best an elusive and some- 
time thing. On the other hand, if the government can make steady 
progress with the outside help available to it from the United States 
and other nations, Pakistan can become a viable, self-sufficient nation. 

I left Pakistan with the feeling; that while it is beset with some 
large continuing problems, Pakistan may be on the way to eventual 
relative prosperity. There are danger signs, such as the growth of 
authoritarianism, the paucity of bureaucratic talent in depth, and con- 
siderable financial difficulties. 

* * * 

India 

india and the world 

India continues to pursue a stated policy of non-alignment. Her 
closest international ties are to the so-called third world countries and 
India maintains a position of considerable influence among other less 
developed countries. Ties to the Soviet Union are closer than to China, 
the United States or to Western Europe. While there is a large Eussian 
presence and Eussia has provided India with economic and military 
backing, there is evidence that Eussian support is being limited. We 
were told, for instance, that the Soviets have generally not sold India 
the latest Eussian military equipment. 

Indians in official positions tend to single out China and the United 
States for criticism. Eelations between India and China now are cold. 
The complex reasons for this are primarily grounded in the rivalries 
one might expect from two different and competing societies near each 
other, their periodic border clashes, and India's decision to turn more 
to the Soviet Union. Chinese activities in the subcontinent disturb the 
Indian government. Senior Indian officials believe that China is pres- 
suring its small neighbors in line with China's geo-political ambitions. 
Indians cite as points of difficulty purported Chinese demands of land 
from Bhutan which would give better access to India. They note that 
the Chinese are helping insurgents in Burma with advice and weapons 
and Indians worry that the Burmese government does not have full 
control of the situation and may find itself in difficulties. 

With regard to Vietnam, the Indians believe the Chinese did not 
get the kind of success that they wanted and that the Soviets are 
gaining an influence there. They believe that China is now pushing in 
Laos and Thailand through subversion, but will not send its own 
forces. The Indian perception of China is that, in the long run, it will 
promote revolution in its periphery and that China may get directly 



8 

involved only in war against the Soviet Union. The Indian leadership 
believes that the Soviet Union does want peace but is frightened of 
China. 

This fear and foreboding in regard to China is not relentless, how- 
ever. One senses that the Indians would like to get on with China, if 
possible. I was told that the Indians welcome the American initiatives 
toward China. One senior official said, "One cannot ignore one-sixth of 
the human race whether one has difficulty with them or not." 

The Indians continue to oppose American plans to develop the 
British island of Diego Garcia into a major base. They maintain that 
the Soviet Union has no bases in the Indian Ocean and that nobody 
has offered them one. As one Indian official put it, "We are certainly 
not. But if the Americans get a base, the Soviet Union will certainly 
want one. We don't want to be squashed between two super-powers." 
India's military structure, while much larger than that of either 
Bangladesh or Pakistan, is unlikely to be seen threatening to nations 
outside the subcontinent. 

India appears to have no intentions of posing a threat to any out- 
side nation, although the Indian Navy is increasingly active in the 
Indian Ocean area. During the last naval exercise of the Central 
Treaty Organization (CENTO) ships of the Indian fleet joined Rus- 
sian ships in keeping tabs on CENTO forces. This increased Indian 
activity may be more directly related to Pakistan's increasing support 
of and participation in CENTO than evidence of any real change in 
the Indian approach to military activities. 

The world is well aware that India set off a nuclear explosion nearly 
two years ago. I understand that India's nuclear program is continuing 
to receive heavy government support. The Indians have claimed that 
the nuclear program will be peaceful, and Mrs. Gandhi indicated in 
response to my questions that she will not give in to any pressure to 
make the program military. I hope that Mrs. Gandhi will be able to 
withstand these pressures. Many leaders of the non-nuclear world 
nations are watching the Indian nuclear developments carefully to 
see in what directions India will go and how the rest of the world, in 
particular the superpowers, will react. 

INDIA AND HER NEIGHBORS 

I was surprised and disturbed to learn in the course of my visit to 
the subcontinent how much the possibility of war is discussed and 
even anticipated. In Pakistan I was told that India is clearly ready 
for war if she perceives it in her own interests and believes that she 
can defeat Pakistan. In India, I heard the reverse of the same theme 
with the Indians claiming that the Pakistanis are building up for war. 
One senior official said, "there is no doubt about it." 

I saw no evidence of a military build-up on either side of the Paki- 
stan-India border — where each side maintains about ten divisions — 
but the talk of such build-ups could not be ignored, since it is a reflec- 
tion of how both sides continue to view the other. I do not believe the 
Indians want to go to war against Pakistan nor do I believe that they 
want to move into Bangladesh. However, the situation could de- 
teriorate to a point in which India would be willing to fight. Many 
observers believe that India would move in if Bangladesh had a gov- 
ernment actively unfriendly to them. The Indian reaction would un- 



9 

doubtedly be very strong if any Bangladesh government moved to give 
official preeminence to Moslems or to develop what the Indians would 
see as dangerously close ties with Pakistan or China. 

Another war in the subcontinent would be an unmitigated disaster. 
If territory were to change hands through military means, India would 
undoubtedly be the gainer. In the extreme, India might take over 
Pakistan and Bangladesh. However, since neither Bangladesh nor 
Pakistan is a military threat to India, it would be a costly solution to 
a non-problem and India, if victorious, would be occupying largely 
Moslem territories which would be hostile forever, thus creating a 
situation of perpetual tension and turmoil to no one r s benefit. Many in 
India realize this. 

Distrust between India and Pakistan has increased in recent months 
with the upheavals in Bangladesh. There have been only small ex- 
amples of cooperation such as telecommunications. The Pakistanis 
wish to re-establish air links with Bangladesh and have agreed to be 
forthcoming on how to handle the problem. However, Pakistanis new 
interest in compromise has served largely to escalate the mistrust of 
the Indians as to Pakistan's intentions in regard to Bangladesh. 

On balance I had the impression that whatever Pakistan's attitude 
may have been in the past about issues with India. Pakistan has con- 
cluded it must try to work with India. The Pakistanis have tried to 
tone down their public propaganda in regard to India and are trying 
more to tread lightly in direct relations with India. I was sorry to 
find I did not detect the same conciliatory attitude in India. If India 
will try sincerely to ease tensions, I hope the Pakistanis will fulfill 
the indications to me that they also were prepared to be forthcoming. 

INDIA AND THE UNITED STATES 

Although there is no bar to good relations with India, relations 
are strained. It will take strong interest on both sides and a continued 
effort for relations to improve in any significant and enduring way. 
I hope that the effort can be made, because I detect a disturbing 
change in the attitudes of Americans toward India. Some years ago. 
when ties were closer and, as one American official put it, Indian food 
plans were being written with an American pen. the relations with 
India were closer despite periodic strains and stresses. In recent years 
India has been inclined to keep the United States at arms length and 
has been reluctant to appear to be in the position of supplicant. The 
distance was widened by the press revelations at the time of the 1971 
war over Bangladesh that the executive branch was tilting toward 
Pakistan. That dark moment in our foreign policy is still well remem- 
bered in India. 

Unfortunately, the Indian government has been quick to criticize 
the United States. It was explained to us while we were in India that 
this criticism served to keep the population alert to outside threats 
and influence. It was not mentioned that pointing to foreign devils 
also serves to take people's minds off of India's incredibly large 
difficulties. 

Such activities as the takeover of Sikkim, the development of a 
nuclear program accompanied by a staunch refusal to join the na- 
tions trying to control nuclear proliferation, continued attack's against 



10 

the United States and the draconian repressive measures inside India 
have led many Americans to conclude that India can simply be written 
off, that what happens in and to India does not matter to us. 

I would not like to see the American people or the American govern- 
ment write off India. While India remains a frustration to many out- 
siders, it also contains the ingredients for meeting the hopes and 
expectations of the rest of the world. India can help point the way 
to solutions in birth control and agricultural and social development 
which could set a standard for the rest of the world. As a less de- 
veloped nation with fantastic potential, India could serve to guide 
other nations with similar problems. 

_ There is no denying that Indian officials are suspicious of the inten- 
tions and the activities of the United States. Recent revelations of 
CIA activities throughout the world, of assassination plots and of 
various espionage activities all serve to feed the suspicions of the 
United States which already exist in India. Many Indians deeply 
believe that the CIA is engaged in covert operations in India. I was 
told further by senior officials that recent events in Bangladesh are 
proof of outside interference. I was also told, by Indian officials, that 
the}' deliberately avoid pointing directly to the United States in the 
absence of positive proof. However, the inference of possible United 
States involvement is usually very clear. 

As Chairman of the Subcommittee on Near Eastern and South 
Asian Affairs, I have been particularly concerned over the possibility 
of United States activities in India. To the best of my knowledge, 
the United States has not been involved in covert operations against 
India. I understand further that steps have been made carefully to 
control intelligence gathering activities in India and Bangladesh so 
as to avoid either the actuality of covert activities or the appearance 
of covert activities. Ambassador Saxbe assured me that he knows of 
no covert operations directed against India. 

I asked Mrs. Gandhi, other Indian officials, and members of the 
western press whether they had reason to believe that the CIA or 
other United States agencies or groups were engaged in operations 
involving India. No person I talked to offered any circumstantial or 
direct evidence of any United States involvement. 

For the relationship between the United States and India to be 
improved, it seems to me that the United States should be friendly, 
but somewhat distant. A close involvement with India would intensify 
American losses and cause deeper problems between the two countries 
when problems came again. It is far better to keep a distance and 
to be willing to help when needed without pushing ourselves^ or our 
projects on India. An aid relationship can only be viable if it is 
believed in the highest levels in India that it is necessary and desirable 
for India. We should not try to overcome India's misgivings about 
United States programs. Rather, we should refrain from any pro- 
grams which cause any misgivings at all. Projects under the joint 
United States-Indian commission, for instance, should have not only 
a scientific approval on both sides but a clear political approval. Pro- 
grams in India will succeed only if the Indians are convinced that 
these programs are in their own interests and will work to make them 
successful. The initiative should always lie with India. 



11 

In the wake of the 1971 war, the United States suspended economic 
assistance to India. AID had contemplated a resumption of the rela- 
tionship this year, and was thinking of lending $75 million for ferti- 
lizer and for a share of the costs of expanding fertilizer production. 

The United States decided to defer talks until fiscal 1977. As of this 
writing, the executive branch expected to negotiate up to about $110 
million in Public Law 480 Title I credit sales for up to 600,000 tons of 
wheat and rice. 

In addition, the United States is providing $72 million in high pro- 
tein food supplements for use by voluntary agencies in India, pri- 
marily to support a school lunch program. 

It should be pointed out that India, in addition to being a food aid 
recipient, is also a very important food customer. During the past two 
years, India purchased from the United States through commercial 
channels nine million tons of food grain, mostly wheat, for about $1.5 
billion. With other sales, the United States enjoyed trade surplus in 
its dealings with India of about $750 million. 

I was deeply disturbed to learn in India that this school lunch pro- 
gram, which is operated largely through CARE, a voluntary organi- 
zation with a deservedly high reputation, is being phased out. The 
Indian government, which now operates 40 percent of the program, is 
to take over, while CARE is to move into a food for work and other 
programs which the Agency for International Development believes 
would better reach the hungriest in Indian. While this is an admirable 
goal, from my experience working with food programs to the poorer 
nations, it seems to me that great care should be taken in review and 
evaluation before abandoning programs which work and are obviously 
needed. 

We were told that the Indian government is not ready organiza- 
tionally and is hard-pressed financially to take over. It would be a 
tragedy if this valuable program were to collapse. I intend to explore 
this matter fully. In the meantime, I urge the Agency for Interna- 
tional Development to re-evaluate this drastic change. 

ixterxal srrrATiox 

Since Mrs. Gandhi declared the emergency last year, her own role 
has become the dominant political issue in India. So far, the emergency 
measures have elicited widespread press criticism and widespread un- 
certainty among those who have long been interested in Indian politi- 
cal developments. Since I left India in mid-January, Mrs. Gandhi has 
taken two major steps to consolidate her power still further. She 
imposed direct rule from New Delhi in the southern state of Tamil 
Nadu and in Gujarat. These two states were the only two of India's 
22 which were not controlled by Mrs. Gandhi's Congress party or other 
loyalists to her regime. Second. Mrs. Gandhi has had the Parliament 
take the step of formally delaying national elections. 

While Mrs. Gandhi enjoys a continuingly large degree of public 
support, she faces a number of hard decisions over tlio next several 
months which may jeopardize her present position. We learned in 
India that opposition to the regime is not abating. Among the increas- 
ingly disenchanted are the intellectual elements and many members 

GS-71.1— 7G 3 



12 

of her own Congress party. Although Mrs. Gandhi has gathered un- 
precedented powers in Delhi, traditional centers of influence inside 
and outside the Congress part}' at state and local levels have been 
basically unchallenged. Many of India's most powerful state and local 
leaders are as opposed as ever to social and economic programs Mrs. 
Gandhi espouses and continue to resist them. If Mrs. Gandhi chooses 
to maintain the status quo or to tighten her personal role, we were told, 
she will probably feel obliged to opt for more suppression of dissent. 
She could seek some reconciliation with the opposition, although this 
would be at the cost of a continued restraint from forcing social and 
economic reforms. This course would be very perilous for her since 
failure of the emergency to produce major social and economic reforms 
would probably lead to erosion of her standing among the peojule which 
would, in the long-term, aid the opposition. 

The declaration of the emergency represented a repudiation of the 
old waj's in India, but since Mrs. Gandhi has been in power for ten 
years and has had the fairly consistent backing of Parliament, the 
emergency also represents a repudiation of her own previous approach 
to governing India. Few doubt that there was much wrong with 
Indian government at the time the emergency was declared but it is 
too early yet to see what will be accomplished in the new, more authori- 
tarian period. 

The traditional freedoms associated with Indian government have 
been steadily diminished under the emergency. Although parliamen- 
tary debate is said to be freer than before and the Parliament is claimed 
to be less disorganized and unfocused, the Parliament under the 
emergency is definitely under the control of Mrs. Gandhi and press 
reporting of Parliament activities is subjected to pre-censorship. The 
newspapers we read while we were in India clearly supported Mrs. 
Gandhi and gave short shrift — if any attention at all — to the thoughts 
and views of the opposition. Mrs. Gandhi has not handled the inter- 
national press with any gentleness. Rules of conduct for the press have 
been established and members of the foreign press are expected to 
adhere to them or to be expelled. Mrs. Gandhi clearly believes that she 
would rather bear the criticism of those who object to her expelling 
or controlling the press than she would bear the criticism of the press 
itself. 

Tens of thousands of political prisoners are still in jail, including an 
estimated 30 members of Parliament. Those jailed include most of the 
leaders of any effective opposition with the result that much of the real 
opposition is being driven underground. This development, of course, 
can be a very perilous one in terms of long-term stability. 

The emergency and the very good 1975 monsoon season leading to 
record crops have given the Indian government time to plan and im- 
plement the long range economic and social policies incorporated in 
Mrs. Gandhi's 20-point program. However, it is too early to assess 
long-term progress. There are the short-term successes of such pro- 
grams as the drive against black money activities, compilation of 
voluntary tax disclosure moratorium on the departure of poorer 
farmers and the establishment of some rural banks. Labor problems 
have been diminished, and there is increased worker productivity and 
industrial production. In many areas the drive for production has been 
helped by heavy unemployment and the fact that workers who quit 



13 

often can find no other work. The emergency has thus been kind to 
industry and businessmen. 

Many believe cynically that the Indian government will continue to 
talk about its long social programs such as land for the landless, India 
for the Indians and so on, but. under the emergency, allow big indus- 
try, big monopolies and big land owners to expand; In order to have 
economic growth, India, before the emergency, would have had to have 
encouraged the private sector more than the government was willing to 
do. As a consequence, there was no growth. Now India appears to be 
willing to allow growth at social cost. 

The world-wide economic slowdown and inflation have depressed 
the demand for Indian exports and increased import costs. Although 
the energy crisis has not had great impact on India's economic growth, 
the oil price increase since the 1973 war in the Middle East has played 
a major part in India's balance of payments situation. India had a 
trade surplus of $13G million in fiscal 1972-73. With the higher oil 
prices, we were told, the trade deficit came to $540 million in fiscal 
1973-71 and $1.15 billion in fiscal 1974—75. The deficit is expected to 
worsen this year. The deficit has been financed through further bor- 
rowing and higher external assistance, including deferred payment 
arrangements with the oil producers for oil imports. 

The most direct impact of the oil price surge upon the Indian 
populace has been in the cost of kerosene for cooking and fertilizer 
for the crops. Soaring fertilizer prices have cut usage substantially 
and, in turn, cut crop yields. 

Other problems still affecting Indian agriculture have kept yields 
below needs and agricultural growth behind population growth. In- 
dian officials told us that although grain storage has been expanded 
to the point that no grain is lost due to lack of storage, the loss to 
rodents is still a substantial problem. For many Indians, poverty, 
the high cost of better equipment and fertilizer, the tightness of credit 
and the fear of risk have combined to keep agricultural progress at 
a slow pace. 

The Indian government has achieved considerable success in its 
anti-inflationary policies. Eetail prices of food have generally re- 
mained steady, and the record harvest will help in keeping prices 
down. The wholesale price index declined nearly 6.6 percent in a 
recent 12-month period. The inflationary rate now is nearly zero which 
is a dramatic drop from almost 21 percent last year. However, credit 
remains tight, and new investment in the private sector is virtually 
non-existent. Modernization and increased capacity will largely occur 
in the public sector although there may be improvement later in the 
private sector if businessmen regain confidence under present policies. 

Consumer demand remains slack from many manufacturers, par- 
ticularly manufacturers of luxury goods. One important reason for 
this is the incredibly high price in terms of salary for many consumer 
goods. In Calcutta, for instance, we were told that the average port 
worker makes about 100 rupees a month (about $11). An industrial 
worker earns an average of 350 rupees a month, including 26 days 
of work, and there is high unemployment largely attributed to the 
current squeeze and lack of consumer demand which means thai there 
is little effective pressure for wage increases. Against these amounts, 
a television at 3,500 rupees is a very costly luxury, and an Indian 



14 

assembled compact car at a minimum of around 30,000 rupees is an 
impossibility for a laborer. 

Population control is the crucial element in India's future. The 
government has worked with periodic spurts of intensity on the prob- 
lem but population growth is still not under control. Estimates range 
from 2 percent to 2.5 percent a year. If the 2 percent rate continues 
the population will double in 35 years. At 2.5 percent it will double 
in 28 years. Both Pakistan and Bangladesh have higher population 
growth. India has been working on family planning at the official 
governmental level since 1952. Sterilization has been the main focus 
of Indian family planning. The program also offers conventional 
contraceptive methods and devices which are distributed freely 
through the rural centers. An effort is also being made to tie the 
family planning program to health programs operated through the 
government's understaffed network of about 5,200 rural main health 
facilities and 30,000 rural sub-centers. At present about IT million 
couples are using one or the other method of family planning. In 
general, the more affluent and educated states have had more success. 
^ I was encouraged in my talk with Mrs. Gandhi to learn of her high 
commitment to family planning. She told me that she is considering 
drastic measures, perhaps penalties, to keep the population down. Mrs. 
Gandhi maintained, "We are taking steps now that we wouldn't have 
taken before" in such matters as family planning. In February, Mrs. 
Gandhi announced a new program, mainly affecting government em- 
ployees, curtailing benefits to those having large families. 

One of the greatest difficulties India faces as it tries to implement 
some of its more ambitious programs is the extremely understaffed 
bureaucracy. The central government has only between 5,000 and 6,000 
career people. This thinness is particularly apparent in the districts. 
One career officer, for instance, had four substantive people working 
for him in a district of five million people. This thinness coupled with 
the opposition to new programs from many quarters and the basic 
fear of change which permeates much of the society all mean that 
change and progress come very slowly to India in any broad way. It is 
quite possible to have demonstration projects in family planning, in 
agriculture and so on, but it is quite another matter to translate these 
to broad and effective programs. 

India remain a country beset by almost overwhelming problems and 
privations. People in India still die by the millions of diseases which 
have been conquered or controlled in wealthier countries. People still 
live and die in the streets. An injection against disease, if not available 
free, can cost as much as a day's wage. In Calcutta we were told an 
estimated 48,000 people have nowhere to go but the streets. For those 
better off in Calcutta the slums stretch on for miles and contain be- 
tween a quarter and a third of the population. Depending upon whom 
you talk to, Calcutta is perceived as a dying or recovering city. The 
frustrations and privations endured in Calcutta are mirrored 
thousands of times over throughout India. 

SUMMARY 

The declaration of a state of emergency in India last June by Prime 
Minister Indira Gandhi marked a "very troubling transition in the 



15 

course of Indian political life. To many, the declaration represented 
an admission by Mrs. Gandhi that she had failed to come to grips with 
India's staggering problems and was, through the emergency, chang- 
ing directions drastically in her approach to government — more to 
enhance her own power than to help her countrymen. Others, more 
generously, believed that Mrs. Gandhi had realized that her former 
adherence* to democratic ideals could not work against insurmount- 
able odds and that it was necessary to go to an authoritarian approach 
in order to bring progress and prosperity to India. 

I was somewhat surprised to find that, although there is consider- 
able opposition, the measures taken by Mr. Gandhi are apparently 
tolerated — and even supported — by a majority of Indians. Observers — 
many of whom have been inconvenienced and frustrated themselves by 
the emergency measures — told me they had found no evidence of wide- 
spread resistance. 

Xow that strikes and work stoppages are not allowed, Indian com- 
merce and industry appear to be functioning better, transportation 
has improved, the government appears to be working on a more order- 
ly, less corrupt basis and the servants and trains are arriving on time. 
Indian officials maintain that the emergency has not weakened or 
destroyed democracy but has made it more purposeful and meaningful. 

Since the declaration, there has been a steady erosion of the tradi- 
tional freedoms, particularly freedom from arbitrary arrest, freedom 
of speech and of the press. A number of news organizations have been 
harassed and foreign correspondents have been pressured and expelled. 
The powers of the judiciary are being undermined. The deliberations 
of the Parliament are carefully manipulated, and public reporting of 
legislative affairs is uniformly supportive of Mrs. Gandhi. 

Asked about these measures, Mrs. Gandhi told me, "They certainly 
won't be permanent." She did not sav when the restrictions would be 
lifted. 

Mrs. Gandhi has postponed national elections for at least a year. 
Many believe this to be a very risky decision, pointing out that the 
stability achieved since the emergency has won wider support among 
many of her most important backers, including the large landholder-, 
industrialist and businessmen, who form the core of her Congress 
party. The repressive measures associated with the emergency may 
become steadily more onerous and difficult to explain and Mrs. Gandhi 
will be forced to prove significant progress in getting the country on 
its feet if she is not to experience a steady erosion of support. 

A predicted bumper food harvest will help buy Mrs. Gandhi polit- 
ical time. This apparent plenty could vanish — along with the credit 
gained — with the next crop disaster. Industrial development and 
agriculture growth cannot of themselves provide a solution to India's 
perennial problems of starvation, malnutrition and underemployment. 
The key to the solution of these other problems is success in popu- 
lation control. Only 16 percent of an estimated 105 million fertile 
couples are practicing birth control. 

As a democrat, with a small "d", I find it impossible to endorse 
the measures Mrs. Gandhi has taken. All democrats must regret to 
see growing repression in a democracy which had endured for 28 
years. However, the best way to judge Mrs. Gandhi and her pro- 
grams will be the effect upon the* quality of life at the bottom of 



16 

Indian society. If India can progress, and if the standard of life can 
be raised measurably, and if the repressive measures can be eased and 
then lifted, then Mrs. Gandhrs rather draconian measures will have 
to be marked as a success, at least in material terms. 

Through this difficult process, I hope that Americans will avoid 
the mistake of mentally writing off India and the heavy investment 
America has made in time, talent and money. We have set a high 
standard for India in the past, and we should not fail her now. The 
relationship between India and the United States could be steadily 
improved if both sides realize that there is no basic bar to good re- 
lations and if both sides would refrain from words and actions which 
give needless offense. 

During this difficult period, India should try her best to live in 
peace with her neighbors. Fighting by India, Bangladesh or Pakis- 
tan over issues which should be resolved peaceably would expend lives 
and capital needlessly and add incredibly to the present misery of 
the subcontinent. Against this misery the potential justifications of 
war appear pretentious, frivolous, insignificant and unworthy of the 
leadership in all three countries. 

India should not approach her neighbors and the rest of the world 
with either sharpened sword or tongue. India's neighbors and the 
rest of the world should, in turn, try to be understanding and sup- 
portive in this terribly difficult time for India and her 600 million 
inhabitants! 

# * # 

Bangladesh 

The last year in Bangladesh has been very turbulent. Sheikh Muji- 
bur Rahman had come to power following the achievement of in- 
dependence by Bangladesh in 1971. Sheikh Mujib, who had been 
imprisoned for treason in Pakistan, began his Prime Ministry with 
a solid base of popular support. In the first parliamentary elections 
Sheikh MujnVs political party, the Bangladesh Awami League, won 
all but 8 of the 315 seats. However, the popularity of the Sheikh 
himself and of his party declined steadily as law and order problems, 
labor, unrest, high unemployment and food shortages continued. There 
was some famine in 1974 as a result of summer flooding. 

By December, 1974, the situation had deteriorated to the point at 
which a state of emergency was declared. In January, 1975, the judi- 
cial system and the Parliament were modified and Sheikh Mujib as- 
sumed the presidency of what was a new one-party state. Although 
the new government had some success in restoring order to the coun- 
try, promised reforms were slow in being implemented and criticism 
against President Mujib grew in an atmosphere charged with cor- 
ruption. Last August 15, President Mujib was overthrown and killed 
by a group of young Army officers. These officers asked a long-time 
political assistant of Mu jib's. Khondakar Mushtaque Ahmed, to be- 
come president. lie did so and asked all officials of the former regime 
as well as members of Parliament to remain in office. Xew martial 
law regulations were put into force. Twenty-six people were imme- 
diately" arrested, including some of the most prominent associates of 
Sheikh Mujib. On November 3, Brigadier Khalid Mosharraf staged 
the second coup, and the majors who had overthrown Mujib were 



17 

exiled. In the early hours of the coup, at least four of Sheikh Mu jib's 
former associates were murdered in jail and in the aftermath Mush- 
taque resigned. The coup leader. Mosharraf, named Chief Justice 
A.S.M. Sayem to head an interim government. The next day Moshar- 
raf was forced out and killed. President Sayem then declared himself 
Chief Martial Law Administrator and appointed the three military 
service heads as deputy chiefs, Parliament was dissolved with new 
elections promised in a year. The Sayem government remain? in power. 

The first coup appeared to give new vigor to Bangladesh as it 
gave a new sense of sovereignty and national identity. It was viewed 
widely to be anti-Indian and pro-Islamic and there were a general 
feeling that the coup would end subservience to India and reduce 
the chance that Bangladesh would become another Sikkim. Support 
quickly grew behind that government by offering few promises and 
little rhetoric, stressing the need to end corruption and to rebuild the 
administration and the economy. The new leadership was gaining a 
firm political base. The second coup was less popular. Khalid Moshar- 
raf was the third ranking man in the Army and he failed because 
he was actively opposed by military elements with equal ability to 
use force and because he was seen by many as pro-Indian and self- 
seeking. In the aftermath, the military have basically become effec- 
tively in control of Bangladesh. General Sayem is se^n as the de facto 
ruler. It is too early to see how the present leadership will fare al- 
though the military does have the advantage of being seen as an arm 
of authority. Clearly, Bengalis beset with the difficulties of the past 
several years, would like to see some return to peace and progress. 
If the military can provide that. Bangladesh may be on the path to 
long-term stability. One of the biggest tasks facing the Army in the 
wake of the coup, we were told, is not to prove that it can govern 
the nation well (the Bengalis are used to bad government) but that 
it can govern itself so that it can rule. 

In the wake of all this the civilian bureaucracy and other centers of 
power have been left somewhat battered. Government is conducted on 
a very cautious basis by others than the material law administrators. 
Civil servants are showing little willingness to take action and to as- 
sume the responsibility for that action. To ^ei things moving, clear di- 
rectives will be needed and with notable exceptions those clear 
directives have not been forthcoming. 

Decision-making is concentrated in General Zia and he may find 
himself hard-pressed to deal with the problems of the Army as well as 
the government. Governing is new to him. and he is obviously feeling 
his way. In my talks with the General. I gained the impression of a 
man who has the interests of the nation in mind and is pushing himself 
and others to overcome many of the serious difficult ies now confronting 
Bangladesh. 

FOREIGN AFFAIRS 

By far. Bangladesh's greatest foreign affairs concern is its huge 
next-door neighbor, India. Many Bengalis fed that the Indian- will 
move upon them it provoked, and they hope that they themselves can 
avoid providing that provocation. Unfortunate !y. these fears of India 
have been expressed in ways that India ha \od as a propaga 

campaign against it and the tempers in both capitals in regard to the 
other are tense. 



18 

As senior members of the government put it. Bangladesh is wedded 
to a policy of non-alignment. They say that this is not a negative 
policy, that it has positive aspects. Foreign policy issues are to be 
based on the over-all needs of the maintenance of peace. All countries 
are favored which support peaceful coexistence and the United Nations 
charter. 

Bangladesh obviously desires to have improved relations and eco- 
nomic cooperation with its neighbors. Bengali officials have visited 
India to reassure the Indian government on points of contention. At 
the same time, the Bengalis are seeking reassurance from India on a 
number of points. An example is the Bengalis claim that the Indians 
are sheltering and supporting dissidents in border areas. Other issues — 
including the continuing propaganda — remain stumbling blocks to 
harmony. 

IXTERXAL DEVELOPMEXTS 

There were several significant economic achievements during 1975 
in Bangladesh. In terms of impact upon the general public the most 
significant event was the good monsoon and lack of disaster which led 
to a bumper rice crop. In addition, the government beat its own goals 
in fighting inflation. The target had been a reduction to 8 to 10 percent. 
The actual result was a reduction to zero. The wholesale price index 
for December, 1975, was about the same as the previous December. 

By contrast, we were told, the wholesale price index rose 75 percent 
between December 1973 and December 1974. Deficit financing has 
been avoided for the second year and credit ceilings are being observed. 

However, a number of problems remain. Bangladesh continues to 
receive a considerable amount of economic assistance, but disburse- 
ments are lagging badly, largely because of management and planning 
difficulties. Development expenditures were expected to be about 45 
percent of the available fiscal year total during the first six months of 
the fiscal year. Actual expenditures came to only about one-third of 
the resources. The pipeline stood at $1.2 billion last July 1, and it is 
being drawn down very slowly. 

There is no complete, consistent development strategy and what 
planning there is is hampered by the brain drain and by the unwilling- 
ness of the politicized bureauracy to act effectively. In financial offices 
as well as in other ministries Bangladesh has a small number of very 
skilled people, but they are said to be capable only of sporadic successes 
and only in areas of primary concern to the regime. 

At present, agricultural prospects are considered dim at best. Ban- 
gladesh will grow about 13 million tons of food grain during this 
bumper year but that total will still be a million tons short of the 
need. With population growth now at 3 percent per year and food 
production increasing at about 1 percent a year, Bangladesh will re- 
main a basket case unless drastic measures are taken both to develop 
food grain production and to limit population. 

So far. the population planning program has not been very success- 
ful. The Embassy gives high marks to the officials now working in the 
family planning area but nothing has been accomplished to break the 
belief widespread in the population that numerous children are the 
only reliable form of social security. Projects to control population 
have been largely demonstrations so far. There have been such pub- 
licized events as vasectomy fairs, and several thousand men have 



19 

come forward during such events. However, in a country with a popu- 
lation of around 75 million, the showcase efforts so far have had only 
minimal effects. 

Agricultural development is hampered by an almost complete lack of 
water control. As a result, Bangladesh, with a mean altitude above sea 
level of less than 20 feet, rocks along from year to year with one disaster 
after another. A certain amount of flooding during the monsoon is 
necessary for the huge November crop. However, with too much water, 
flooding constitutes a disaster — with too little, there is drought and 
poor harvest. Officials estimate that to do complete flood control in 
Bangladesh would cost in the billions of dollars. 

A possibly more productive approach is the one now being pushed, 
which involves better use of the river water available for irrigation 
and the digging of wells for irrigation. Wells are expected to be the 
main source of irrigated water in the northern districts. 

The main November crop is produced on about 14 million acres. 
The second largest crop in May involves about 2.8 million acres and 
is dependent largely upon irrigation. A total of 1.5 million acres are 
now under controlled irrigation. A total of 42.000 low-lift wells and 
19.000 deep tube wells have been installed, and the irrigated acreage 
will expand as this program continues. 

It should be noted that one of the continuing sources of contention 
between Bangladesh and India is the question of water in the Ganges. 
The Bengalis claim that deliberate diversions by India have lowered 
the water level and created water shortages. 

The poverty of Bangladesh has led to widespread corruption and 
diversion of resources on behalf of the rich and well-to-do to spare 
them the privations of the rural poor. who. as one observer said acidly, 
"have the good grace to die quietly," For instance, it is estimated by 
the Bangledesh government that 82 to 83 percent of the fanners are 
basicalh T bvpassed by outside grant assistance, leaving the bulk of 
rural development funds going to support rich land owners. 

The lot of the rural poor has been very difficult in the past. The ex- 
isting- power structure in the rural areas took advantage of the 
fertilizer rationing system so that the rich land owners benefited from 
the availability of the fertilizer and the very poor paid black market 
rates for what little fertilizer they could <ret and afford. There is a 
tremendous need for better grain and fertilizer storage. The govern- 
ment estimates that it needs a fertilizer storage of 9 million tons. At 
present the capacity is around 240.000 tons. Such organizations as ATI) 
are now helpi?i.fr to get fertilizer to the small farmer arid the fertilizer 
situation is said to have improved over the past several months. How- 
ever, substantially higher governmental support and a sound system 
of supervised eredit will be needed if fertilizer distribution is to work 
properly. Farmers organizations are relatively undeveloped, but the 
building up of such groups will probably be necessary if the small 
farmer is to have necessary relief. 

The embassy and the Agency for International Development have 
urged steps to overcome some of the treirumdous inequities inherent in 
the food distribution program. As present rationed foods from the 
United States and other nations are used essentially as a governmental 
support program rather than to help the poorest of the poor. In order 
to receive rationed foods one must have a card. These cards have been 



20 

given to government workers as a partial substitute for salary. (The 
ration card system had gotten so bad that while an ordinary man could 
not get one for himself and his family, wealthy merchants sometimes 
had as many as 15,000). 

A modified rationing system has been in operation in five urban 
areas under which rationed foods are in theon' widely available on 
the basis of need. Until the recent harvest, rationed rice cost one fourth 
as much as rice on the free market. With the lush harvest, free market 
rice was reduced to a price level about double the rationed price. I 
was pleased to learn that, following our visit, the government insti- 
tuted some of the suggested changes including sharp reduction of the 
food subsidy, so that rationed and unrationecl prices are now close, at 
least for the present. These steps will help, but they do not accomplish 
the basic reforms needed. Assistance should be redirected from the 
middle classes to the neediest — particularly the rural poor. 

The present rationing system is vulnerable to manipulation for 
political advantage. The result is almost always said to be greater 
hardship for the rural poor. As an example, the government decided 
last year to extend the ration card system to the labor unions to ease 
unrest. According to observers, this had the immediate effect of 
reducing by one half the amount of rationed food available to the 
rural poor. 

The United States has played a very large role in providing assist- 
ance to Bangladesh since independence. Most of the assistance has been 
in the form of PL-480 sales and grants. During the current fiscal year, 
the United States provided 400.000 tons of wheat, 150.000 tons of rice 
and 40.000 tons of edible oils. The totals during fiscal 1977 are expected 
to be about 25 percent higher. Agency for International Development 
programs are running at a level of around $60 million annually. The 
program appears well directed toward the key problems of food and 
nutrition. I was particularly impressed in my discussions with AID 
people, and others in the United States mission, in finding a high de- 
gree of understanding and compassion in regard to Bangladesh, as 
well as a realistic and well-informed comprehension of the problems 
faced. 

The United States undoubtedly will be sending food grain to 
Bangladesh over the next several years at least. However, the executive 
branch should not continue open ended support of the rationing sys- 
tem. To do so would constitute a sell-out to the rich and it would do 
nothing for the rural poor. To the extent that the ration system pro- 
motes corruption and misuse, it will hurt the most needy in 
Bangladesh. Because of the fragile situation in Bangladesh, it proba- 
bly would not be wise to insist on an immediate abolition of the ration- 
ing system. However, the Bangladesh government should be pressed 
strenuously to reduce the difference between the price of rationed rice 
and the free market price and to extend the benefits of the food assist- 
ance programs to the persons needing it most. 

Given the conditions in Bangladesh, many observers wonder why 
the skilled, talented and educated can be expected to stay. Prospects in 
Bangladesh are bleak and improvement is uncertain. A trained drug- 
gist could leave for the United States and do better than a cabinet sec- 
retary in Dacca. Many assess their chances here or in Bangladesh prag- 
matically and leave. 



21 

Industry has not recovered since independence. Total industrial out- 
put is estimated to be less than 80 percent of the 1969 level. Export of 
both industry goods and raw products are down. Before independence, 
for instance, jute exports were put at 550,000 tons a year. The present 
level is around 400,000 tons. Total export receipts in fiscal 1969-70 
were $542 million. Exports during the current year are expected to be 
$350 million. Another year of export stagnation will mean that Bang- 
ladesh will spend most of its foreign exchange financing oil imports. 
The rest will largely go we were told to import such items as tobacco, 
baby food, medicine and consumer goods for the middle classes. 

The very limited ability to pay for imports has and will continue to 
have tremendous impact in holding down development. Bangladesh is 
very poor in the resources necessary to support economic development 
outside of agriculture. As one embassy official noted, "Bangladesh even 
has to import rocks." 

Despite the three violent revolutions of the past year Bangladesh 
remains a country in which very limited resources are used heavily to 
support the relatively well-to-do property owners and politically im- 
portant groups. There is not very much to go around in Bangladesh 
but four years after the revolution matters have not improved greatly. 
There has been not enough re-distribution of wealth nor enough appli- 
cation of talent and energy to improve significantly the lot of the 
poor. While there is much less starvation in Bangladesh now than in 
any other year since independence, that is largely the result of good 
growing conditions rather than governmental success. 

The current government is generally given high marks for under- 
standing a number of the problems it must address. However, except 
for the success in fighting inflation — which was again attributable in 
large degree to good weather and good crops — the government has yet 
to make some of the hard decisions it must make if Bangladesh is to 
be drawn out of its present morass. 

CONCLUSIONS 

The United States has joined other nations in providing food and 
technical assistance to Bangladesh. These efforts should continue, but 
the United States and other donors should insist upon better perform- 
ance and better use of the aid provided. 

The United States mission in Bangladesh has so far refrained from 
getting too deeply involved in trying to oversee developmental pro- 
grams in Bangladesh. I believe that an arms length arrangement is 
appropriate in Bangladesh, particularly given the present interna- 
tional nature of assistance to that country. The United States should 
support a multilateral assistance, rather than bilateral, whenever pos- 
sible and should work with other nations to apply strict standards 
for outside support. 

I was repeatedly queried in Bangladesh as to the possibility of a 
military assistance program and I responded that I did not believe the 
mood of the Congress is such that it would wish to initiate a military 
assistance program at this point. I expressed the hope in each capital 
I visited in South Asia that all the parties would re-emphasize at- 
tempts to find peaceful solutions to the remaining outstanding issues. 



22 

Clearly any military build-up program of any size would be extremely 
difficult for the fragile Bangladesh economy to bear. 

To me, South Asia provides an example of a situation in which an 
influx of arms would offer tremendous potential for war and do very 
little to enhance prospects for peace. There is no doubt that in a war, 
India could crush Bangladesh and any Bengali attempts to spend 
their way to a military force which could cope for more than a few 
days with India would be ruinous to the civilian economy. Any 
attempt by India actually to take over Bangladesh, while successful 
militarily, could be a political, social, economic and foreign policy 
disaster for India, and perceptive Indians know it. I received a definite 
impression while in Delhi that the Indians, while sharing blame with 
the Bengalis for the virulent propaganda war which continues, abhor 
the thought of an invasion of Bangladesh and fear a repetition of 
difficulties that came in the wake of the 1971 war. 

For India, for Bangladesh and for Pakistan, there can be no ac- 
ceptable alternative to attempts to live in peace with each other. 
Beyond that, it is clear that the development of peaceful commerce in 
South Asia is crucial to the economic development of the region and 
the betterment of the desperate lot of the less fortunate of all three 
countries. 

o 



Ill 



UNIV 



ERSITY OF FLORIDA 



3 1262 09113 1606